Company registration number 04312379 (England and Wales)
ABBOTS CARE LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
Faulkner House
Victoria Street
Rayner Essex LLP
St Albans
Chartered Accountants
Hertfordshire
AL1 3SE
ABBOTS CARE LIMITED
COMPANY INFORMATION
Directors
Mrs C A Leavold
Mr A P Todd
(Appointed 2 November 2022)
Secretary
Ms S E Dowouna Hyde
Company number
04312379
Registered office
Units 5 & 6
Phoenix House
63 Campfield Road
St Albans
Hertfordshire
AL1 5FL
Auditor
Rayner Essex LLP
Faulkner House
Victoria Street
St Albans
Hertfordshire
AL1 3SE
ABBOTS CARE LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 5
Independent auditor's report
6 - 9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Notes to the financial statements
13 - 25
ABBOTS CARE LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MAY 2023
- 1 -
The directors present the strategic report for the year ended 31 May 2023.
Business review
Abbots Care Limited's vision is to be distinguished as a company and employer of choice home care in the UK. Also to be a leader in the field of care delivery by making a difference to our customer’s lives, by providing highly trained care workers, excellent customer service, valuing all those who work for us and placing our customers’ needs at the heart of everything we do. Our goal is to provide outstanding care and support to older people and help people with disabilities live happier, healthier and more fulfilling lives at home. We aim to achieve this by delivering services to both government and privately funded care recipients.
The start of the 2022 -2023 financial year was the first time in 3 years that the business started the year without the fluctuating cycles of Covid and the difficult economic and environmental challenges it brought with it.
Recruitment and retention of Care Workers continued to be a challenge in the sector for the first half of the year and as the recruitment market started to ease in early 2023, our recruitment team saw success in recruiting sufficient numbers of new care workers and operational staff to meet the demand for our services.
Our International Recruitment under our Home Office Sponsorship License continued to be a success with a total head count of 73 new Senior and Care Workers to date having migrated to join the Abbots Care team. This has carried on supporting Abbots Care with the hospital discharge services.
We continue our focus on wellbeing and staff recognition through our Wellbeing app for the care teams, with 65% of employees engaged. This has supported staff retention, which in turn has helped further growth.
As always, we continue to maintain a strong commitment to investment in quality and growth. The company has carried on investing heavily into the quality of its services and is accredited to BSI 9001 Total Quality Management standards. Abbots Care also a strong quality management team who are targeted to continually drive quality and continuous improvement throughout the business.
We have seen an overall increase in headcount with new hires to support both the quality and growth teams.
The Home Care market continues to grow with more and more people looking to receive care at home and we continue to have a good pipeline of referrals from both of these sources.
Our outlook is positive and strong, with an expectation of increased growth and profitability in the next year.
ABBOTS CARE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 2 -
Principal risks and uncertainties
The senior management team led by the managing director maintains a risk register, reviewed regularly by the senior management team. The principal risks identified are: 1. Insufficient workforce to maintain the planned service and well-being of service users; 2. Covid-19 risk to service users and staff; and 3. Risk of reputational damage and safeguarding of services users as the company grows.
These risks and mitigated through investment in and growth of the recruitment and retention team and a multi-faceted strategy of engagement, development and support of the workforce. The company uses a robust and proven inflection control and prevention policy and a barrier team. The quality and compliance team monitor compliance and conduct regular audits to ensure high care standards are maintained.
Regulatory compliance
The company adheres to the regulations set down by The Care Quality Commission. The newly created role of head of compliance and quality ensures ongoing compliance together with the registered managers.
The most recent full inspection of the company by The Care Quality Commission took place during August 2021, and the company achieved an overall rating of 'outstanding'
The company is certified as compliant in the BSI: 9001:2015 Total Quality Management Certificate and is audited 6 monthly. In the latest report dated March 2023, the company had no non-compliances recorded.
Covid-19
The pandemic has affected the company positively in terms of business as usual and the company saw a higher demand for its services throughout the pandemic, albeit having introduced new procedures to manager the infection risk. The government and local authority grants help to meet additional costs of PPE and staffing during the pandemic has provided the necessary support financially to meet the additional costs incurred.
Staffing
The company's staff are key to the services that it can provide its service users. In common with many industries, the company is facing challenges in the labour market, with competition both within the industry and from other industries.
Brexit
Following Brexit, some care workers left the business to return to their country of origin, and the business has faced challenges in replacing them. In response, the company is in the process of applying for a UK visa sponsorship licence, which should help with staffing going forwards.
Summary
For most out of financial year 2022-2023, we were able to successfully follow the business plan and forecast to meet the company's KPIs including quality standards, quality, growth and retaining cash reserves within the business.
We aim to use the cash reserves to generate further growth and offer more services to customers in need of support in using the same business model and key objectives in 2022-2023.
External auditors for compliance including BSI, CQC and local authorities have rated the company good and outstanding.
The company looks forward to FY2024 and beyond with confidence.
ABBOTS CARE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 3 -
Development and performance
The key financial highlights are as follows:
Turnover £13.7m (2022: £13.2m)
Turnover growth/(decline) 3.9% (2022: (2.2%))
Profit before tax ££0.5m (2022: £1.7m)
Current ratio 2.2:1 (2022: 2.8:1)
Net assets £4.6m (2022: £4.6m)
The non-financial highlights are as follows:
Hours of care (thousands) 571 (2022: 570)
No. of care workers (average) 399 (2022: 388)
The company's principal activities have performed strongly during the period and the directors are pleased with its performance and position at the balance sheet date.
Mrs C A Leavold
Director
14 February 2024
ABBOTS CARE LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MAY 2023
- 4 -
The directors present their annual report and financial statements for the year ended 31 May 2023.
Principal activities
The principal activity of the company continued to be that of domiciliary home care providers including mainstream home care, live-in-care, extra care, complex care, and reablement care for local authorities and NHS.
Results and dividends
The results for the year are set out on page 10.
Ordinary dividends were paid amounting to £208,492. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Ms S E Dowouna Hyde
(Resigned 2 November 2022)
Mrs C A Leavold
Mr A P Todd
(Appointed 2 November 2022)
Research and development
The company is working with a software developer to develop a bespoke mobile application for staff engagement.
Disabled persons
Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the company continues and that the appropriate training is arranged. It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.
Employee involvement
The company's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.
Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the company's performance.
There is no employee share scheme at present, but the directors are considering the introduction of such a scheme as a means of further encouraging the involvement of employees in the company's performance.
The company's employees are at the heart of the service it provides. The company has a policy of continuous improvement and consultation with all stakeholders including all employees. Registered with BSI to BSI:9001
Total Quality Management, the company consults with all its stakeholders. The company has a Business Involvement Group with employee representatives who consult and advise on improvement to all functions within the services provided by the company. All employees are consulted quarterly through employee surveys, and the results are shared in a biannual quality report.
Future developments
The company will continue in its principal activity.
The directors continue to review the marketplace with a view to continuing growth, identifying opportunities and managing the risks facing the business.
Please see the strategic report for more details on the company's future developments.
ABBOTS CARE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 5 -
Auditor
Rayner Essex LLP were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
Mrs C A Leavold
Director
14 February 2024
ABBOTS CARE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ABBOTS CARE LIMITED
- 6 -
Opinion
We have audited the financial statements of Abbots Care Limited (the 'company') for the year ended 31 May 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 May 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
ABBOTS CARE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ABBOTS CARE LIMITED
- 7 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
ABBOTS CARE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ABBOTS CARE LIMITED
- 8 -
The extent to which the audit was considered capable of detecting irregularities including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the limited liability partnership through discussions with the members and other management, and from our commercial knowledge and experience of the sector they operate in;
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the limited liability partnership, including the Companies Act 2006, Care Quality Commission guidelines, taxation legislation and data protection, anti-bribery, employment and GDPR regulations;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the limited company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
the engagement partner ensuring that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
making enquiries of management as to where they considered there was a susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we;
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
reviewed the meeting minutes during the year and beyond;
assessed whether judgements and assumptions made in determining the accounting estimates set out in note 2 were indicative of potential bias; and
investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statement disclosures to underlying supporting documentation
enquiring of management as to actual and potential litigation and claims; and
reviewing correspondence with HMRC, the CQC and the limited company's management.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limited the audit procedures required to identify non-compliance with laws and regulations to enquiry of the members and other management and inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
ABBOTS CARE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ABBOTS CARE LIMITED
- 9 -
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Neil Heyes FCA
Senior Statutory Auditor
For and on behalf of Rayner Essex LLP
14 February 2024
Chartered Accountants
Statutory Auditor
Faulkner House
Victoria Street
St Albans
Hertfordshire
AL1 3SE
ABBOTS CARE LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MAY 2023
- 10 -
2023
2022
Notes
£
£
Turnover
3
13,688,976
13,171,316
Cost of sales
(8,951,218)
(8,811,224)
Gross profit
4,737,758
4,360,092
Administrative expenses
(3,584,756)
(3,428,220)
Other operating income
228,871
727,964
Exceptional item
4
(908,105)
Operating profit
5
473,768
1,659,836
Interest receivable and similar income
8
25,085
531
Profit before taxation
498,853
1,660,367
Tax on profit
9
(270,216)
(318,697)
Profit for the financial year
228,637
1,341,670
The profit and loss account has been prepared on the basis that all operations are continuing operations.
ABBOTS CARE LIMITED
BALANCE SHEET
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
11
18,836
19,818
Tangible assets
12
222,532
150,103
Investments
13
899,321
950,000
1,140,689
1,119,921
Current assets
Debtors
15
3,882,128
2,548,615
Investments
16
1,500,000
1,500,000
Cash at bank and in hand
1,113,388
1,356,617
6,495,516
5,405,232
Creditors: amounts falling due within one year
17
(2,989,101)
(1,897,745)
Net current assets
3,506,415
3,507,487
Total assets less current liabilities
4,647,104
4,627,408
Creditors: amounts falling due after more than one year
18
(449)
Net assets
4,647,104
4,626,959
Capital and reserves
Called up share capital
22
28
28
Profit and loss reserves
4,647,076
4,626,931
Total equity
4,647,104
4,626,959
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.true
The financial statements were approved by the board of directors and authorised for issue on 14 February 2024 and are signed on its behalf by:
Mrs C A Leavold
Director
Company registration number 04312379 (England and Wales)
ABBOTS CARE LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2023
- 12 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 June 2021
28
3,562,145
3,562,173
Year ended 31 May 2022:
Profit and total comprehensive income
-
1,341,670
1,341,670
Dividends
10
-
(276,884)
(276,884)
Balance at 31 May 2022
28
4,626,931
4,626,959
Year ended 31 May 2023:
Profit and total comprehensive income
-
228,637
228,637
Dividends
10
-
(208,492)
(208,492)
Balance at 31 May 2023
28
4,647,076
4,647,104
ABBOTS CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
- 13 -
1
Accounting policies
Company information
Abbots Care Limited is a private company limited by shares incorporated in England and Wales. The registered office is Units 5 & 6, Phoenix House, 63 Campfield Road, St Albans, Hertfordshire, AL1 5FL.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Abbots Care Holdings Limited. These consolidated financial statements are available from its registered office, Units 5 & 6 Phoenix House, 63 Campfield Road, St.Albans, Hertfordshire. AL1 5FL.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown inclusive of VAT and other sales related taxes.
Revenue relates to care services provided and is recognised on provision of the services.
Revenue for the provision of care services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
ABBOTS CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 14 -
1.4
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Mobile application
33% Straight Line
If there is an indication that there has been a significant change in amortisation rate, useful life or residual value of an intangible asset, the amortisation is revised prospectively to reflect the new estimates.
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Fixtures and fittings
Over 4 years
Computer Equipment
Over 3 years
Motor vehicles
Over 4 years
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.6
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
ABBOTS CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 15 -
1.7
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.8
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.9
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
ABBOTS CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 16 -
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
ABBOTS CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 17 -
1.10
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
The amount recognised in profit or loss as an expense in relation to defined contribution plans was £201,951 (2022: £234,555).
1.14
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
ABBOTS CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 18 -
1.15
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
Government grants comprise amounts received under the Winter Discharge Support Fund, Infection Control Fund, Covid Support Claim, Rapid Testing Fund, and under various other covid support schemes including the Coronavirus Job Retention Scheme.
Grant income to be recognised in future periods, includes grants received in relation to capitalised IT equipment which will be recognised in line with the useful life of the equipment.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Revenue recognition
The percentage completion of services provided by the company, is calculated in line with the accounting policy on income recognition, by reference to the costs incurred over the period in which the services are provided.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Trade debtor and accrued sales valuation
Trade debtors and accrued sales are reviewed for indicators of impairment on a line by line basis, and where the estimated recoverable amount is less than the carrying value, an impairment is recognised; and
Other receivables valuation
The recoverability of receivables due from related party debtors, and the requirement for provisions thereon, is based upon an estimate made by management of both the value of the assets held by the undertakings, and its future performance.
ABBOTS CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 19 -
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Rendering of services
13,688,976
13,171,316
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
13,688,976
13,171,316
2023
2022
£
£
Other revenue
Interest income
25,085
531
Grants received
228,871
727,964
4
Exceptional item
2023
2022
£
£
Expenditure
Impairment of assets
908,105
-
The directors have made a provision against a balance in relation to an amount that is no longer considered recoverable from a related party entity following a decision by the related party's management to commence voluntary winding up processes post balance sheet date. The nature of the impairment is considered exceptional to the normal course of trading and therefore has been disclosed in accordance with FRS 102.5.
5
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
(228,871)
(727,964)
Fees payable to the company's auditor for the audit of the company's financial statements
15,420
15,420
Depreciation of owned tangible fixed assets
62,612
64,174
(Profit)/loss on disposal of tangible fixed assets
(266)
15,391
Amortisation of intangible assets
10,741
8,382
Operating lease charges
176,753
178,167
ABBOTS CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 20 -
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Care workers
399
388
Administrative management
72
69
Total
471
457
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
9,653,768
9,322,257
Social security costs
864,363
698,197
Pension costs
201,951
234,555
10,720,082
10,255,009
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
48,817
30,245
Company pension contributions to defined contribution schemes
3,594
53,641
52,411
83,886
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 1).
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
25,085
531
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
25,085
531
ABBOTS CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 21 -
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
270,216
318,697
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
498,853
1,660,367
Expected tax charge based on the standard rate of corporation tax in the UK of 20.00% (2022: 19.00%)
99,771
315,470
Tax effect of expenses that are not deductible in determining taxable profit
182,080
10,691
Permanent capital allowances in excess of depreciation
(11,635)
(7,464)
Taxation charge for the year
270,216
318,697
10
Dividends
2023
2022
£
£
Interim paid
208,492
276,884
11
Intangible fixed assets
Mobile application
£
Cost
At 1 June 2022
28,970
Additions - internally developed
9,759
At 31 May 2023
38,729
Amortisation and impairment
At 1 June 2022
9,152
Amortisation charged for the year
10,741
At 31 May 2023
19,893
Carrying amount
At 31 May 2023
18,836
At 31 May 2022
19,818
ABBOTS CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 22 -
12
Tangible fixed assets
Fixtures and fittings
Computer Equipment
Motor vehicles
Total
£
£
£
£
Cost
At 1 June 2022
130,549
127,125
52,120
309,794
Additions
17,854
117,578
135,432
At 31 May 2023
130,549
144,979
169,698
445,226
Depreciation and impairment
At 1 June 2022
20,306
113,373
26,012
159,691
Depreciation charged in the year
28,220
13,255
21,137
62,612
Eliminated in respect of disposals
391
391
At 31 May 2023
48,917
126,628
47,149
222,694
Carrying amount
At 31 May 2023
81,632
18,351
122,549
222,532
At 31 May 2022
110,243
13,752
26,108
150,103
13
Fixed asset investments
2023
2022
£
£
Unlisted investments
899,321
950,000
Movements in fixed asset investments
Investments
£
Cost or valuation
At 1 June 2022
950,000
Cash deposits
350,000
Cash withdrawals
(400,679)
At 31 May 2023
899,321
Carrying amount
At 31 May 2023
899,321
At 31 May 2022
950,000
ABBOTS CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 23 -
14
Financial instruments
2023
2022
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
3,745,699
2,463,216
Equity instruments measured at cost less impairment
899,321
950,000
Instruments measured at fair value through profit or loss
1,500,000
1,500,000
Carrying amount of financial liabilities
Measured at fair value through profit or loss
Measured at amortised cost
3,197,965
1,883,611
15
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,483,237
999,394
Other debtors
1,469,055
752,041
Prepayments and accrued income
929,836
797,180
3,882,128
2,548,615
16
Current asset investments
2023
2022
£
£
Unlisted investments
1,500,000
1,500,000
17
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Trade creditors
64,460
52,836
Amounts owed to group undertakings
2,128,286
926,247
Corporation tax
(231,123)
44,661
Other taxation and social security
22,259
(32,488)
Deferred income
20
2,410
Other creditors
(6,952)
952
Accruals and deferred income
1,012,171
903,127
2,989,101
1,897,745
ABBOTS CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 24 -
18
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
19
449
19
Loans and overdrafts
2023
2022
£
£
Bank loans
449
Payable after one year
449
20
Government grants
2023
2022
£
£
Other deferred income
-
2,410
21
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
201,951
234,555
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
22
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
A Ordinary shares of £1 each
14
14
14
14
B Ordinary shares of £1 each
14
14
14
14
28
28
28
28
The B Ordinary shares have no voting or dividend or capital distribution rights.
ABBOTS CARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 25 -
23
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
162,610
160,180
Between two and five years
319,815
377,424
In over five years
92,400
574,825
537,604
24
Capital commitments
Amounts contracted for but not provided in the financial statements:
2023
2022
£
£
Acquisition of tangible fixed assets
102,330
97,133
25
Related party transactions
During the year, the company entered into the following transactions with related parties:
Sales were made to parties subject to common control of £350,189 (2022: £140,115). Expenses have been incurred from parties subject to common control totalled £242,549 (2022: £342,692). In addition, short term, interest free loans have been made to the same parties. At the reporting date, a net balance of £1,118,558 (2022: £697,487) was receivable by the company from the parties subject to common control.
During the period the company granted a joint loan to the directors of the company amounting to £231,148. The loan was provided interest free and with a repayment date of 29 February 2024.
26
Ultimate controlling party
The ultimate controlling party is Abbots Care Holdings Limited, a company incorporated in England.
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